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Barter, an $8-12 billion dollar industry, is one of the businesses that flourishes in bad economies, as it offers entrepreneurs many opportunities to acquire things they need and want for no or little cash. Here are some of the things you should know about Barter, a great Bootstrapping activity.

It is the exchange of goods and services for other goods and services with little or no cash involved.

The advantages of Barter are:
- You receive goods and services you need without paying cash.
- You receive full retail value for what you are trading which enhances your balance sheet, it allows you to utilize your excess capacity and time and it can help you get new customers from the company you bartered with as they will continue to buy from you for cash when they run out of credits, if they are pleased with your offering and service. This satisfaction generates the most effective form of advertising: word of mouth which will get you new customers.

Most Barter works through exchanges who locate the buyers for you and offer the huge range of products you can acquire through the trade dollars you get when you sell your product. This way you do not have to find buyers for your products as they did in the early days of Barter.

You pay a fee of about 12% to the exchanges for their services. Most exchanges charge to join.

All Barter transactions are taxable.

To locate the Barter Exchange that best fits your needs, go to a major search engine and type in Business Bartering.

Now is the perfect time to start and run your own barter exchange… let me explain why.

Lines of Credit – What does this have to do with a barter exchange? To the bold barter exchange owner, his business of barter can assist businesses and individuals in ways banks and the community can’t, namely in giving interest free lines of credit. When is the last time you borrowed money from a bank that was willing to give you a permanent 0% interest rate on a credit line? Businesses still need financing for expansion, just like in boom times, but right now banks aren’t lending much and if they were, you’d still need amazing credit, an 800 FICO score, and referrals from the governor and your local senator to get a loan. In a barter exchange, you get to decide who does and does not qualify for a loan, and you get to see the improvement in business and celebrate along side a new loyal customer.

Take advantage of the down market – Sites like Craigslist and U-Exchange have seen a huge upswing in the number of postings in their barter sections. If you are the one to start a barter trade exchange, you are going to be entering a very undeveloped market. Doing direct trades on sites like Craigslist and U-Exchange are difficult. Using a barter exchange is easy. All businesses want to conquer new markets. With your help as their barter broker, you’ll guide them to make new sales and make purchases that will help them succeed.

Take advantage of the current interest in barter – Like I said before, cash is tight. Thousands of businesses are turning to any other system besides cash to be able to continue to do business. Your barter exchange, if you start one, can be a vehicle to attract the businesses that are looking for somewhere to barter, and there are thousands of them.

Take advantage of an under developed industry – Currently there are less than 500 barter exchanges in operation in the United States. Those exchanges are only doing business with less than 1% of the businesses in the US, combined. Clearly this is a growth industry. Your local area may have an exchange in it already, but they are probably only doing business with a couple of hundred businesses in the area, at most, so there is always room for more barter exchanges.

When the owners of Joey’s American Road Service wanted T-shirts for their staff, they didn’t need money. Instead they bartered services for the shirts and were able to conserve their cash for more important things.”I have always loved working with the bartering system,” said Gabe Magnone, co-owner of the business at 1725 S. Nova Road.

While the idea of bartering — the direct exchange of goods and services — is hardly new, advances in technology have expanded the scope of bartering far beyond the early days of swapping butter and eggs for sugar. Firms now use trade dollars or credits they earn by trading available inventory or staff time for products and services.

Christopher Muller, a professor at the University of Central Florida, said bartering has been used effectively by restaurants and other businesses for years. “When the economy turns soft, many people think of it as a good way to control cash flow,” Muller said this week.

At various times, all restaurants do some kind of trade for goods and services, he said. “It is especially useful for radio and television advertising programs.The restaurant will offer a certain amount of face value dining coupons and the media outlet will run advertising in the same amount, both sides see themselves as winning.”

Bartering is a great way for businesses to get rid of excess inventory during slow periods like the current recession. Many businesses don’t have the cash flow they need or are sitting on excess inventory with no buyers in sight. Paul Rompf, another UCF professor, agreed. “Bartering makes sense if you have excess capacity and you want to reduce cost. It (also) is a way for businesses to acquire goods and services they otherwise might not be able to afford,” Rompf said.

If you find yourself without access to currency, bartering is a method by which you may secure items in trade. Another benefit of bartering is that traded items can help you generate goodwill from others and secure needed services. However, in order engage in a successful trade, you will need to be prepared.

As you consider which items you may wish to collect, here are some guidelines that I think may be helpful.

LOOK FOR MEDIUM QUALITY AT LOW PRICES
Remember that goods purchased for trade are not for your own personal use. Your outlay of funds now is an investment designed to generate a high profit for you later. Don’t purchase junk, but look for good prices on good products that are in the mid-range of quality.

Tools can be found in varied quality. When purchasing for yourself, you’ll want the best tools you can afford, but when purchasing for trade, good quality at a discount price is preferable. You won’t be able to trade junk, but you can find good bargains at flea markets, consignment shops, pawn shops, garage sales, yard sales, estate sales, and other discount stores.

WHEN NEEDED, REPAIRED ITEMS ARE JUST AS GOOD AS NEW
When deciding which items you’ll trade, don’t forget to consider your skills. Slightly worn and used items can be restored to full functionality if you have the know-how to make repairs.

ITEMS WITH MORE THAN ONE USE
Look for things which can be used for more than one purpose. This will save storage space and increase your opportunities to trade. Items such as duct tape, tarps, string or twine, blankets, rubber bands, buckets, basins, soap, and assorted cloth fall into this category.

CREATE YOUR OWN BARTER GOODS
It’s a good idea to learn a skill that will allow you to make your own goods for trade. A helpful skill is knowing how to manufacture ammunition. Read up on bullet swaging to learn how to do this. Skills in metalworking, sewing, pottery, masonry, soap making, candle making and foraging will be beneficial for bartering as well as for your own personal use.
INFORMATION
Reference books on self-sufficiency are good trade items. Vary your collection with entertaining fiction. Valuable literature will be that which offers both an entertaining story AND an education. Shop for used books offered at a discount.

Posted on December 7th, 2009
Original Post by: Joanna Smiley, a freelance writer from Collinsville, will periodically serve as a guest columnist for the Hartford Business Journal.

http://www.hartfordbusiness.com/news11198.html

There’s a movement sweeping through many of the businesses in Hartford’s Growing Green Co-Op and it has nothing to do with dollars.

Over half of the 100 small organizations that belong to the co-op are catching a green bartering fever, says co-op founder Imani Zito. These eco-conscious folks are determined to grow their businesses in the crippled economy and they’re realizing that bartering with each other offers a way for them to gain products or services without having to shell out cash.

“Many of these businesses wouldn’t be around if they didn’t barter,” said Zito, who founded the co-op, which she calls the state’s “green chamber of commerce,” in the fall of 2008.

Zito stands in front of a chalkboard bursting with colorful catch phrases like “sustainable living” and “grow the local economy.” She says she will barter “almost anything and everything” for the sake of green business growth.

While businesses have often developed trade agreements with other businesses, a focus on trading services among green enterprises adds a new twist to an old model.

For example, Zito recalls bartering with two people who walked into the co-op announcing that they were starting a nonprofit wilderness program. They offered to grow food in exchange for help with finding a place to stay. Zito jumped at the chance to work with them. She plans to use some of the food for the co-op’s raw food dining establishment, Alchemy, which Zito describes as a “barter restaurant.” She says it’s not uncommon for her to let someone walk into the restaurant and wash dishes in exchange for food.

For Zito, bartering rests deep in her soul. One of Zito’s first barters happened when she met her husband.

“I gifted him a massage and in return he bought some groceries for my family (single mom with three little ones at the time). It was a very sweet gesture. We have been bartering every day since,” she said smiling.

Looking towards the future, Zito’s hope is simple. She believes that like-minded business owners must continue to help each other sustain growth and stay afloat during these trying economic times. Zito wants to eventually establish her own “barter economy” with co-op members.

Bartering system is not something new for us, it has deep historical roots. The entire business setup of our ancestors was primarily based on bartering. When we go through the business chapters of the old days, we can note how people used to do their daily business to survive. Many folks still find it tricky to recognize bartering as one of the fast growing form of engaging in business without involving money. On the contrary, bartering is growing in renown today with enterprises and consumers realizing how great way it is to budget and how creative way it is to lower costs. Credit goes to the modern technology as bartering has become alive again. The internet has seriously helped it to make a powerful comeback and folk now may be able to trade services or products without using money.

Bartering has proven to be an effective way to ease cash flow issues for established and expanding businesses. It also helps in building a customer base for the new businesspeople. In bartering business, you can trade everything from landscaping, furniture, printing, travel, and so on. Bartering is proving itself as a cheap and sensible way to economize. Actually, bartering is everywhere, even at our home. Don’t you remember when your mum had said ‘if you do your home work, you would get chocolate’. Bartering is an element of our life, though unnoticed. We do barter in different forms. Bartering is present in different magnitudes, from our houses to a well established business empire.

If we know the correct way to barter, many resources and probabilities will be opened for us. It is an innocent way to look after our needs while also offering others what they require all without involving money. On a wider and professional scale, we can offer our services and products we no longer need, in return for getting from others the goods and services that they no longer need. Bartering can help us become a successful trader without involving money.

Gina LaValle of Arlington, Texas, is bartering for Christmas gifts for her four children,reports Marianne Martinez from CBS 11 News. The LaValles moved to Texas after her husband, Richard, lost his job and the family lost their house in New Mexico. Since then Richard has been working two jobs, and they have been selling everything to pay bills — even Gina’s wedding ring.

She offered her work services on Craigslist in return for gifts, hoping that she would be able to give her children a happy holiday. “Last year, they didn’t get a Christmas,” she told 11 News. “I don’t want a hand out, that’s why I said I would barter.”

Self reliance by its very name implies going it alone, but I think cooperation and exchange (barter) has a place in self reliant living. Barter is a non-monetary exchange of value. I am not discussing formal bartering between commercial professionals– that can result in a taxable event. For example, an accountant offering tax prep services to a home improvement contractor in exchange for work at his house is probably a taxable event.

What I am talking about are the non-taxable exchanges between family, friends, and neighbors. This is not a new idea– just a neglected or forgotten one.

When I was a kid, I remember a neighbor with talent for auto repair who helped on almost all auto repair projects in the neighborhood. In return, he received assistance on yard work, painting, and other odd jobs. This is the sort of “bartering” I am thinking of these days.

* Communicate– let people know what you have and what you need
* Commit– a handshake and your word
* Deliver– be sure to come through for people
* Share– talk your fellow barterers up describing the experience to others

Sometimes cash isn’t needed to get things done or as valuable to others as an exchange might be. Always try to identify opportunities to barter– as in all things self reliant, be creative!

Bartering is a system of trade that predates the use of money, whereby you trade your skills, services, or products for something you want from someone else.

About 25 years ago, during a recession in the early 1980s, a lot of bartering clubs sprang up, so people who were out-of-work or having financial problems could increase the funds available to them. Once people joined the group, they could turn their skills, services or products into points; then others could employ them or purchase their products using the points they had accumulated in their own accounts. And if no one wanted to use one’s skills, services, or products, they would accumulate negative points up to a cap, until they found a way for others to want what they offered. Through this system, these clubs sought to achieve a fair balance between what people were getting and giving.

As an organizer, think of running a barter service as a new business, which can be very successful if you have the skills needed to run the business, such as a good head for figures, an attention to detail for everyday operations, and good communication, marketing, and sales skills to promote the service. If you simply want to participate in bartering, you might do this directly by offering an exchange with your own contacts or try posting whatever you are offering on one of the social media sites like LinkedIn.

To determine what to list, think about what you have done in the past and list what you can offer that might be of interest to someone else. If you have a lot to offer, divide up your skills, services, or products by category and post them separately.

Everyone knows that having a child is something that needs to be planned in advance, from diapers to formula, your bundle of joy can cost you a bundle of cash. With high unemployment rates and the economy still in the doldrums, parents are trying to get the most from their dollars.

One expensive aspect of raising a child is clothing and other items. “With children’s gear, there’s a lot of inefficiencies and waste,” says Michael Satz, chief executive of BarterQuest.com. “Stuff ends up hanging in a closet, getting thrown out or donated.”To help, free Web sites have popped up that let parents barter for clothing, toys and equipment. On BarterQuest.com, you list the items you don’t want and swap them for the items you do want. [Read Full Article]